This is awesome, thanks for submitting this @bkase!
Unfortunately, there doesn’t seem to be too much liquidity available: only ~242k$ in the 4pool on StellaSwap today. We probably need a bit more liquidity before we could increase the collateral factor to anything meaningful safely.
I think this is a direct result of what @Luke outlined here
One thing that I wanted to make the community aware of is that native USDT recently came to Polkadot on the Statemint parachain. This is an XCM asset that can be transferred from Statemint to Moonbeam, however, getting xcUSDT is quite difficult right now due to a number of factors:
- Tether can only be purchased if you have a Bitfinex account, which is not available to US persons.
- Tether has to “mint” USDT on Polkadot/Statemint using the Polkadot Ledger app
- The Polkadot Ledger app didn’t have support for XCM until Thursday, Nov. 3rd, when it was updated by Ledger
- It still may take some time for Bitfinex to upgrade and test their signing Ledgers
Seeing this, I think the user experience for xcUSDT is bad enough/confusing enough that it should be removed from this proposal, and the focus should be on the wormhole assets only.
I think there’s a world where polkadot eventually has a good user experience for native assets like xcUSDT, but there’s also a chance they never do, and pragmatically I think if xcUSDT is listed, there’s a real risk of it never building up enough liquidity to be used as collateral.
I think the most ideal version of this native asset flow would be an ability to withdraw directly from exchanges to Moonbeam somehow, doesn’t matter if it happens via some sort of LayerZero type messaging rube goldberg machine, but if I have an ability to land something like xcUSDT on moonbeam directly from an exchange account, that’s generally going to be the rail that I take instead of a bridge.
Same deal with institutions and general ecosystem liquidity - if liquidity can more quickly move on chain to moonbeam then that means there is a higher likelihood that liquidations function as intended since there’s less friction to get liquidity to where it needs to go.